Forex Bill Makes $500 per Tourist Exchange Optional
On Monday, the government submitted the new Foreign Exchange (Forex) Bill, which proposes to change the current mandatory requirement for resorts to exchange $500 per tourist optionally or to enable them to exchange 20% of revenue instead.
The bill mandates that tourism businesses earning at least USD 15 million annually must deposit their foreign currency income in local bank accounts. For Category A resorts, the requirement is to exchange either USD 500 per tourist or 20 percent of their total monthly income.
The bill includes provisions for dollar-based payments at resorts while introducing additional concessions. Exceptions to the proposed exchange include:
Tourists staying at the resort for less than 24 hours
Children under 10 years of age
Guests provided free accommodation at resorts
Visitors granted special privileges by the government
Category B guesthouses must exchange either USD 25 per tourist or 20 percent of their monthly foreign exchange earnings.
Industry representatives have expressed concerns about the $500 per tourist exchange requirement required under an October regulation and earlier proposed in the forex bill, with some voicing criticism regarding its potential impact on the tourism sector.
Initially, the bill targeted non-tourism entities earning foreign exchange equivalent to USD 20 million annually, requiring them to deposit at least 25 percent of their income into Maldivian banks. However, the threshold has now been reduced to USD 15 million. MMA noted that the bill offers businesses two exchange options, allowing them to choose their preferred method of compliance.
